Network endorses AEMC strategic priorities

The Energy Networks Association (ENA) endorsed the Australian Energy Market Commission’s (AEMC) discussion paper on strategic priorities in June.

The AEMC paper, Strategic Priorities for Australian Energy Market Development, was launched at a stakeholder forum in April. The forum provided an opportunity for stakeholders to understand the paper and the direction the AEMC sees as priorities for the future.

The ENA “generally” agreed with the three strategic priorities for development of the energy market as proposed by the AEMC, which included a predictable regulatory and market environment for rewarding economically efficient investment, building the capability and capturing the value of flexible demand, and ensuring the transmission framework delivers efficient and timely investment.

While the AEMC’s paper was primarily focused on electricity and the National Electricity Market (NEM), the ENA noted the important role gas would have in the energy market in the future.

The ENA said that it does not support a broad review of the law and rules for the economic regulation of energy networks at this stage.

“After only a few years of operation, there is considerable risk and no clear benefit in fundamental changes to governance arrangements or principles of network regulation set down in the law and rules,” the ENA stated.

“We understand that the AER is currently analysing its recent regulatory reviews, and it may propose a number of changes to the processes and interpretation of the rules. The ENA and its members look forward to providing their insights to the AEMC as it considers any AER rule change proposal.”

The ENA supported the comments made by the Minister for Energy and Resources, The Hon. Martin Ferguson AM MP on energy networks in his presentation at the AEMC’s forum and at the ENA Smart Network Summit in May.

“The Minister noted the increases in distribution prices in recent years and this reflects a range of complex factors including the need to replace ageing assets and the need to strengthen networks to cope with rising peak demand and to improve reliability,” the ENA stated.

“The Minister highlighted that network businesses must continue to make large commercial investments to ensure reliable and secure energy supplies. ENA submits that the capacity of network businesses to depends to a large extent on sound and stable regulatory policy.”